Why Bitcoin Could Drop Below $90,000—Even After a Fed Rate Cut

Bitcoin convincingly ran back up above the key $90,000 price level on Sunday but remains down by more than a third from its record high in October. (Dreamstime)

Bitcoin and other cryptocurrencies advanced on Wednesday ahead of a widely expected interest-rate cut from the Federal Reserve, which should boost sentiment across markets.

But crypto traders may be facing the possibility of a decline in Bitcoin prices even if the Fed cuts rates.

The price of Bitcoin rose 2.5% over the past 24 hours to $92,700. Bitcoin convincingly ran back up above the key $90,000 price level on Sunday but remains down by more than a third from its record high in October.

“Bitcoin has broken through the ceiling of a falling trend channel in the short term,” wrote investing platform Investtech based on an analysis of technical market indicators for Bitcoin. “The currency has support at points $84,000 and resistance at points $107, 000. The currency is assessed as technically slightly negative for the short term.”

The Fed is widely expected to cut rates by a quarter-point on Wednesday, but investors may be more focused on a speech from Fed Chair Jerome Powell and a summary of central bank officials’ economic projections.

The question of whether interest-rate cuts will continue in 2026—marking a further reduction in borrowing costs that should boost Bitcoin as well as risk sentiment more broadly—remains uncertain.

If remarks from Powell or the Fed’s summary of economic projections paints a picture of a central bank that may not cut rates much, or at all, in 2026, Bitcoin could suffer as one of the leading-edge risk assets.

Crypto traders may be preparing for that negative possibility. Evidence in the Bitcoin options market—where traders bet on specific future price moves—suggests bearish sentiment with preparations for a price drop.

There is a concentration of “puts”—contracts that pay out if prices drop to a specific level or “strike price” by a certain expiration date—for Bitcoin at $89,000 by Thursday, based on open interest levels on the exchange Deribit.

The $89,000 level is the most popular strike price by open interest of any option expiring on Thursday, with overall more puts than calls—bullish bets on a higher strike price—in the Deribit options market.

Beyond Bitcoin, Ethereum—the second-largest crypto by market capitalization—jumped 6.5% to above $3,300. Smaller cryptos or altcoins were also buoyant, with Ripple up 1%, Solana surging 4%, and Dogecoin advancing 4%.